Daily Archives: May 17, 2018

Uncategorized

Sell These Stocks As Amazon Delivers Healthcare to Your Home

The old way of providing healthcare in the United States is fast disappearing and being replaced by new technologies, which is changing the way healthcare is dispensed. And many of these new providers of healthcare are not your traditional healthcare companies. These are among the findings of the latest research from PricewaterhouseCoopers (PwC).

Some interesting data garnered by PwC illustrates the changes occurring. PwC found that only 17% of doctors used EHRs (electronic health records) and 11% of people in the U.S. had a smartphone in 2008. But now those percentages have risen to 87% and 79%, respectively. That essentially opens the door for technology firms to step through and deliver what patients want and need, faster and more effectively than traditional healthcare providers.

No wonder then that PwC said it found that the U.S. healthcare system is undergoing “seismic change”.

This seismic shift in how healthcare is provided is being led by very familiar technology names – Apple, Google, Microsoft, IBM and, of course, Amazon.com (Nasdaq: AMZN).

Amazon AI and Healthcare

I have written about the latter’s forays into the healthcare field several times and for good reason. A recent survey (2018 Healthcare Prognosis Survey) from the venture capital firm affiliated with the Rockefellers, Venrock, found that 51% of participants thought Amazon would have the biggest impact on the healthcare industry in 2018 among the technology firms. The next closest was Apple at 26%.

Among the healthcare initiatives coming from the company are Amazon, JPMorgan and Berkshire Hathawayannouncing (in December 2017) the formation of a new healthcare company which would use technology to provide high-quality healthcare to patients and families more simply, and at a more reasonable cost. The initial focus of this company would be the employees of the three companies.

This move and just the rumor of Amazon’s entry into pharmaceutical and medical supplies distribution sent the stock prices for more established healthcare companies and pharmacy chains tumbling a few months ago.

Amazon is well-known as a disruptor into whatever industry it gets into, so it is intriguing because the U.S. healthcare industry is so ripe for disruption. Just consider this…

In 2016, U.S. per-person healthcare expenses were $10,348. That was more than double that of other first-world countries that offer universal health coverage. Here are some examples from other developed countries: $4,752 in Canada, $4,600 in France, $4,708 in Australia, and $4,192 in the U.K. And for all that money here in the U.S. in many ways our healthcare below that of other advanced nations. For example, medical errors kill more Americans annually than motor vehicle accidents.

Much of what Amazon (and others) are likely to do will center around the use of artificial intelligence (AI). This is the model followed by the Chinese tech giants, Alibaba and Tencent, which have been experimenting with employee healthcare software for years now.

The New York Times reports that over 130 Chinese tech firms were using AI to increase efficiency and accuracy (right diagnoses) in the overburdened Chinese health system. The Amazon venture with JPMorgan and Berkshire Hathaway will likely go down the same path, perhaps using AI to forecast patients’ needs based on data collected from patients with a similar health history.

Alexa, How Am I Feeling Today?

If Amazon does go down the AI path, a big part of that will involve its smart assistant, Alexa. There are lots of rumors around that Amazon is building a “health & wellness” team within its Alexa division.

Alexa is already being used in a number of healthcare-related ways. Here are just a few…

In September, Amazon announced that basic health information and advice provided by the Mayo Clinic would be available on Alexa. Users can download the Mayo Clinic First Aid skill on their device and then voice their concerns to the machine, which will give answers to dozens of everyday health issues or other self-care instructions. In a similarly vein, in March 2017, people looking for quick answers to care questions could also integrate the WebMD skill on any Alexa-enabled device. Next on Amazon’s list for Alexa may be diabetes care. Last autumn, the winner of the Alexa Diabetes Challenge was a voice-enabled diabetes support platform called Sugarpod.

The ultimate goal is to make Alexa more “useful in the healthcare field” with information on health for expectant mothers, newborn infants, people with disabilities, people with chronic diseases and tools for our aging population.

The main obstacle may be the government’s HIPAA requirements to ensure users’ data remains private. But I suspect Amazon will work through this and become HIPAA compliant. After all, they are not Facebook.

Investment Implications

Besides investing in Amazon, what are the investment implications of this upcoming change in how healthcare will be delivered?

Some on Wall Street say that Amazon has lost all interest in the distribution of drugs and medical supplies to hospitals and other healthcare facilities. I think these are just hopeful wishes coming from people that own the traditional healthcare supplies provider stocks.

Related: Sell These Healthcare Middlemen About to Get Amazoned

In other words, the companies that I told you before that are vulnerable to disruption from Amazon still are. Some of these I’ve mentioned before including drug distributors Cardinal Health (NYSE: CAH) and McKesson (NYSE: MCK). But it also includes companies that move basic supplies to doctors, dentists and veterinarians such as Henry Schein (Nasdaq: HSIC) and Owens & Minor (NYSE: OMI). Just a few months ago, the CEO of Owens & Minor, Paul Cody Phipps, said on a conference call that Amazon was talking to many large hospital systems, “including our customers.”

Two ETFs that are loaded with middlemen stocks, the iShares U.S. Healthcare Providers ETF (NYSE: IHF) and the SPDR S&P Health Care Services ETF (NYSE: XHS), should also be avoided.

Amazon will make it a tough environment for the middlemen that have fed at the healthcare trough for many years. And even President Trump’s recent speech on healthcare took aim the middlemen, and he vowed to eliminate them. These companies will be at the epicenter of the seismic change in the U.S. healthcare system and should be avoided.

Buffett just went all-in on THIS new asset. Will you?
Buffett could see this new asset run 2,524% in 2018. And he's not the only one... Mark Cuban says "it's the most exciting thing I've ever seen." Mark Zuckerberg threw down $19 billion to get a piece... Bill Gates wagered $26 billion trying to control it...
What is it?
It's not gold, crypto or any mainstream investment. But these mega-billionaires have bet the farm it's about to be the most valuable asset on Earth. Wall Street and the financial media have no clue what's about to happen...And if you act fast, you could earn as much as 2,524% before the year is up.
Click here to find out what it is.

Source: Investors Alley 

Uncategorized

7 Stocks to Sell Before It’s Too Late

Source: Shutterstock

Ask not for whom the bell tolls, it tolls for significantly overvalued stocks. I’ve been saying for quite some time that the overall market is overvalued by about 25% and there are a lot of stocks to sell.

The market is at its third most expensive in history. We’ve been starting to see some cracks in the foundation, and volatility is increasing, and we all know that corrections are inevitable.

The problem is that complacency can often be the market’s worst enemy. There are a number of stocks that are ridiculously overvalued. That doesn’t mean they can’t stay that way. In fact, some of them have been ridiculously overvalued for quite some time. The reckoning is coming.

You should consider taking some money off the table if you own any of the following stocks. In fact, it may not be a terrible idea to close the position completely, or at least put a hedge in place.

Stocks to Sell Before It’s Too Late: Tesla Inc (TSLA)

Source: Elon Musk via Twitter

Tesla Inc (NASDAQ:TSLA) is right at the top of my list in terms of stocks to sell. No, I’m not trolling you.

The Elon Musk con is starting to enter its endgame. The company continues to burn through cash like nobody’s business and will need to do a capital raise before the end of the year, despite what Elon Musk says. What’s more, Tesla is far behind in its manufacturing and delivery schedule, which leaves an opportunity open for rival car manufacturers to get their own electric vehicles to the market first.

Tesla’s valuation is absurd to the extreme. If you can find shares to short, in fact, and have the stomach for it, that could be an interesting play.

Stocks to Sell Before It’s Too Late: Netflix (NFLX)

netflix stock

Source: Shutterstock

Netflix Inc. (NASDAQ:NFLX) is a terrific company, and it is producing some wonderful original content. The problem is that Netflix just continues to borrow billions and billions of dollars to produce this content while producing very little in the way of net profit, although that situation is starting to improve.

Still, $670 million of trailing 12-month net income is knotted enough to justify a $143 billion valuation. Netflix cannot possibly justify selling for 200 times net income.

Sure, Walt Disney Co (NYSE:DIS) has a valuation of $151 billion. Despite Stranger Things and other hits such as Godless, Netflix is no Disney.

Stocks to Sell Before It’s Too Late: JD.com (JD)

JD Stock Is Sitting at Make-or-Break Support

Source: Daniel Cukier via Flickr

JD.com (NASDAQ:JD) is another of the top stocks to sell. Let me tell you why I think that …

…  because it literally makes no money! Its operating expenses almost exactly offset total net revenues. For instance, management burned through $1.4 billion in the past quarter alone.

While I think this is a business that has potential, considering it has nearly 7,000 delivery stations and 250 warehouses in China, it is a long way to go before it can justify its $52 billion valuation.

JD stock is 30% off of its high, meaning its valuation was closer to $70 billion in the not-too-distant past. I see no reason to hold the stock now, and in a major correction, it’s possible that the stock might fall to a level that might make sense.

Stocks to Sell Before It’s Too Late: Shake Shack (SHAK)

shake shack, SHAK stock

Source: Mike Mozart via Flickr (modified)

Shake Shack Inc. (NASDAQ:SHAK) is also a stock that has been perpetually overvalued, even at its present valuation of $2.15 billion. Last year’s entire operating income came to just under $34 million, meaning the stock trades at 63x operating income. That alone makes it a candidate for stocks to sell.

I know that it is supposedly in its growth phase, but it is also seeing some substantial expense growth. Legacy burger joints like McDonald’s Corporation (NYSE:MCD) and The Wendy’s Company (NYSE:WEN) both trade for around 13 times operating income.

Shake Shack’s same-store sales only rose 1.7% in the most recent quarter. I’m not sure why I’m supposed to be impressed by that.

Stocks to Sell Before It’s Too Late: GoDaddy (GDDY)

High Multiples and Lack of Moat Make Godaddy Inc (GDDY) a Stock to Avoid

Source: Shutterstock

GoDaddy Inc. (NYSE:GDDY) has a great brand and a pretty decent business, but it’s definitely one of the top stocks to sell.

Its revenues are growing at a pretty nice clip, although expenses are eating that revenue down pretty significantly. The company had $67 million in operating income last year, an improvement over the $31 million operating loss of 2015.

Nevertheless, I see a company trading with the valuation of $11.7 billion, which is about 18 times operating income. Yet it is also trading at about 85 times its net income of $136 million.

That is a substantial improvement from the previous year $16 million loss, but again, I see no way the company’s valuation is justified.

Stocks to Sell Before It’s Too Late: Etsy  (ETSY)

Source: Shutterstock

We have a similar situation with Etsy, Inc. (NASDAQ:ETSY). The online specialty storefront marketplace is also seeing decent revenue growth, however, it is also seeing its expenses grow along with it.

Backing out a $50 million income tax benefit, the company only made $32 million last year! Yet ETSY stock trades at a valuation of $3.5 billion — more than 100 times that income. Does that make sense to you? If it does, we must be living in different realities.

The good news is that 10% of that valuation can be pulled out and reduced because of its cash position. The other piece of good news is that it did generate decent free cash flow last year, just about $64 million worth. That, however, doesn’t make ETSY shares worth holding onto.

Stocks to Sell Before It’s Too Late: Yelp (YELP)

YELP Stock Will Continue to Drop Thanks to Amazon, Facebook and Google

Source: Shutterstock

Yelp Inc. (NASDAQ:YELP) has become a dominant player as far as business reviews are concerned.

Despite a lot of unhappy vendors who claim that Yelp tries to extort them into advertising, the company is enjoying a $3.1 billion market valuation after you back out its $800 million or so in cash. What isn’t so impressive is its operating income was only $15 million last year, following two years of losses.

There are better stocks out there to buy that aren’t experience prolonged losses.

  [FREE REPORT] Options Income Blueprint: 3 Proven Strategies to Earn More Cash Today Discover how to grab $577 to $2,175 every 7 days even if you have a small brokerage account or little experience... And it's as simple as using these 3 proven trading strategies for earning extra cash. They’re revealed in my new ebook, Options Income Blueprint: 3 Proven Strategies to Earn Extra Cash Today. You can get it right now absolutely FREE. Click here right now for your free copy and to start pulling in up to $2,175 in extra income every week.